Saturday, July 26, 2014

ObamaCare Issue: Private Choice Versus Government Coercion

Debate on public issues should be uninhibited, robust, and wide open.

William Joseph Brennan, Jr (1906- 1997), Supreme Court Justice, New York Times v. Sullivan (1964)

Issues raised by ObamaCare boil down to private choice versus public coercion. There are unsettling issues on both side of the political divide that do not lend themselves to easy solutions.

Some issues come down to volume-based care (i.e. paying for care without question while trusting doctors and hospitals ) and to value-based care (paying for results and outcomes based on data).

It’s not that simple. Psychological , philosophical, and ideological issues, e.g. trust in government versus trust in markets, government control and coercion versus individual freedoms and free enterprise loom.

An example of coercion is ObamaCare with its individual and employer mandates with penalties if one does obey these mandates. Exemplifying choice is free market medicine allowing physicians and hospitals to charge fee-for-service with market competition allowing consumers to choose providers.

Phil Gramm, former House of Representative member (R-Texas). believes choice and freedom will be winning issues for Republicans in the upcoming midterms.

“There is one unifying principle that Republicans can and should rally around now; the right of American families to choose their own health-care coverage…Americans should have the right to buy insurance that meets their own needs…in the end they debate is not about money or efficiency, it is about freedom.( “ 2014 Health-Care Strategy: Freedom, WSJ, July 25, 2014).

Aligned against the freedom concept are ObamaCare supporters who insist the central issue is affordability for the uninsured, the poor, and the sick. This strategy requires subsidies , redistribution of resources , and coercion in the form of mandates, penalties, and higher taxes.

Both solutions require tradeoffs, compromises, and tectonic shifts in thinking (Rene Letourneau, “ Four Tectonic Shifts Shaking Up Health Care”, Health Leaders Media, July 24, 2014). According to Andrew Croshaw, president of Leavitt Partners Consultants, four of these tectonic shifts are:

1. Risk-based reimbursement - Accountable Care Organizations, bundled services, shared savings for Medicare patients. These approaches tend to be coercive. They require government oversight and losses of freedoms and choice for patients and physicians, particularly specialists.

2. Health insurance exchanges - Implementing these exchanges is coercive . Making them work demands federal-state cooperation, federal subsidies of $4200 per patient, an efficient computer system, narrowing of physician networks, and significant increases in premiums for the young and the healthy. Coercion is needed to generate enough revenue in penalties to support the system. Patients lose freedom of choice through narrowed networks.


3. High deductible plans with health savings accounts. These plans stress freedom of choice of action for consumers. Liberals and Obama advocates in general oppose HSAs with high deductible plans because they leave choice in the hands of consumers, who may exercise their own judgments rather than following federal guidelines.

4. Economic dispassion - Coercive. ObamaCare is based on premise market dispassion trumps emotions surrounding keeping your doctor and health plan. Tends be coercive. Under ObamaCare, patients will be directed to low cost hospitals an and doctors (sometimes called “race to bottom’) who will be paid on basis of adherence of guidelines and value (outcomes /dollar spent), rather than volume ( paying and trusting doctors to do the right thing). The notion is: use data to control and judge performance and improve quality: sacrifice choice and freedom of patients and doctors if necessary.

Friday, July 25, 2014

Conventional wisdom has it U.S. needs a comprehensive public-private national bureaucratic system to cure all health woes. Maybe so. But maybe we also need direct no-nonsense access to doctors and surgeons, as set forth in Direct Pay Independent Practice – Medicine and Surgery, Kindle book, amazon.com, $9.97
Great Expectations and High U.S. Health Costs

Great Expectations

Title of Charles Dicken’s Novel

Great Expectations is regarded as Charles Dicken’s greatest novel. It concerns relationships of man and society in Victorian London , and what Victorians expected of that society.

This blog is about what Americans expect of their health system. We expect convenient high tech care from specialists with near perfect results. These results may include complete cure of disease, return to normal function, perpetuation of youth and beauty, avoidance of complications and of death, and relief of pain and discomfort.

When these great expectations are not met, Americans, more than citizens of other developed nations, sue their physicians ,their health institutions, and anybody or anything associated with their care.

America’s malpractice lawyers, under the rules of American jurisprudence, which do not require lawyers and clients to pay if a suit is lost, potentially reward plaintiffs with huge open-ended settlements. The number of law suits in the U.S. exceed numbers in other nations, for attorneys in America have much to gain and little to lose. The fact that U.S. trial lawyers have a powerful political lobby and are major contributors to political parties, tends to perpetuate the culture of great health care expectations.

This culture also contributes to a society in which “more” is expected. As Dicken’s Oliver Twist said, “Please, sir, I want some more.”

In the current issue of Atlantic, Victor Fuchs, the renowned health care analyst from Stanford and prime promoter of the idea of managed competition, says U.S. citizens and providers always want more: “We deliver three times as many mammograms, two-and-one-times as many MRIs, and a third more C-sections than the average OECD country (“Why Do Other Rich Nations Spend So Much Less on Health Care,” Atlantic, July 23, 2014).

Why does the United States spend so much more?

According to Fuchs, “ The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians.”

We have more technology of every kind, more aggressive treatments of the sick and dying, more treatment in intensive care units, more physician visits, more hospital days, more expensive drugs, more expensive administrative costs, but less government spending on health care - 50% compared to 75% on total costs than other nations.

Fuchs answer to all of this is a more powerful role for government and more managed competition in the private sector.

“With regard to healthcare, the United States is at a crossroads. Whether the Affordable Care Act will significantly control costs is uncertain; its main thrust is to reduce the number of uninsured. The alternatives seem to be a larger role for government or a larger role for managed competition in the private sector. Even if the latter route is pursued, government is the only logical choice if the country wants to have universal coverage. There are two necessary and sufficient conditions to cover everyone for health insurance: Subsidies for the poor and the sick and compulsory participation by everyone. Only government can create those conditions.”

Nowhere in his piece does Fuchs mention the great expectations of the America people or the role of American malpractice attorneys. Yet we as a people, our culture, expects more specialty care, more high tech, more drugs, more intensive care for the sick and dying, and more perfect results. If we do not get more, someone has to pay the consequences.

Our health system is a creature of our culture. We are pro-democracy and anti-government. We are anti-authority and desire a government that governs least. We look to local solutions, reject federal mandates, prefer equal opportunities over equal results, feel capable of making our own decisions, seek access to high tech solutions, rely on specialists rather than generalists, and are victims of our great expectations. With regard to high health costs, as Walt Kelly’s Pogo remarked, “We have met the enemy, and he is us.”

Thursday, July 24, 2014

10 Million Newly Insured Because Of Health Law, Study Says

Preface: From time to time, I reprint ,with their permission, material from Kaiser Health News. Their lead story is today is that the Affordable Care Act reduced the rate of uninsured by 5.2% from October 13, 2013, the date of healthcare.gov launch to June 2014. The full text of the article is available in July 24, NEJM.org.

The study, done by Harvard researchers and published by the New England Journal of Medicine, was based on Gallup polling and data from the Department of Health and Human Services. It also estimated that the uninsured rate declined by 5.2 percentage points in the second quarter of 2014.

In their conclusion to their NEJM piece, its six authors carefully hedge their bet on the future of ObamaCare and the significance of their data: “These observations are merely observational. We can only identify suggestive associations between the ACA, the declining insurance rate, and access to care.”

The Associated Press: Study: 10M Have Gained Coverage Through Health Law

A new study estimates that more than 10 million adults gained health insurance by midyear as the coverage expansion under President Barack Obama’s law took hold in much of the country. The study published Wednesday in the New England Journal of Medicine found that the share of Americans ages 18 to 64 without insurance dropped by a little more than 5 percentage points

Politico: New England Journal Of Medicine Report: 10 Million Newly Insured

The Obama administration is touting yet another study showing that the Affordable Care Act has expanded health insurance to millions of Americans — this one published in the New England Journal of Medicine and estimating that 10 million have gained coverage under the law. Using Gallup polling and HHS data, Harvard researchers estimate that the uninsured rate declined by 5.2 percentage points in the second quarter of this year, corresponding to 10.3 million adults gaining coverage — although that could range from 7.3 to 17.2 million depending on how the data are interpreted. At least one researcher also has an HHS affiliation (Winfield Cunningham, 7/23).

Modern Healthcare: 10.3 Million Gained Insurance Under Obamacare

About 10.3 million Americans have gained insurance coverage since the full implementation of Obamacare last year, according to an analysis published Wednesday in the New England Journal of Medicine. The uninsured rated dropped to 16.3% at the end of April from 21% before the initial open enrollment period for plans on the new insurance exchanges. The decreases were most pronounced among low-to-middle income households in states that expanded Medicaid eligibility to residents with incomes up to 138% of the federal poverty level .

The Hill: Study Finds 10.3M Gained Insurance Through Health Law

The study conducted by researchers from the Department of Health and Human Services and Harvard University found the the number of uninsured has fallen from 21 percent in September 2013 to 16.3 percent in April 2014. In particular, it found jumps in the insurance rates for Hispanics, blacks and young adults.

Reuters
: Over 10 Million U.S. Adults Gain Coverage Under Obamacare

The study, which appeared in the New England Journal of Medicine, also found evidence that more Americans had a personal doctor and fewer difficulties paying for medical care within the first six months of gaining insurance (Morgan, 7/23).
Ouch! Government Accounting Office (GAO) Sting Reveals Applications for Subsidies Can Be Faked

Nothing stings more sharply than the loss of money.

Livy (58 BC to 17 AD), History XXX

Something is rotten in the state of Denmark.

Shakespeare (1564-1616), Hamlet


Government subsidies are what make ObamaCare work. Subsidies are what make the individual and employer mandates possible. Without subsidies, ObamaCare collapses into an unworkable, unsustainble heap.

Subsidies take the sting out of ObamaCare premiums. Without subsidies, premiums become unaffordable, subsidized people exit from the market, and ObamaCare enters a death spiral.

According to Betsy McCaughey “A Ruling That Could Doom ObamaCare,” New York Post, July 22, 2014), without ObamaCare, subsidized people would have to pay four times the subsidized price. That would be too much financial pain to bear, and they would withdraw from the ObamaCare market.

McCaughey is referring to the possible effect of the Halbig-Burwell ruling on July 22. The ruling barred the federal government from handing out subsidies in 35 states with federal health exchanges.

In those states, five million people enrolled in health exchange plans. Eighty five % qualified for subsidies because of individual incomes below $46, ooo or family incomes of $194,000 or less.

If the Halbig- Burwell ruling were to stick (it probably won’t, and it may be up for the Supreme Court to decide), a mass exodus from ObamaCare plans would occur, an insurer death spiral would ensue, and ObamaCare would die.

This theoretical sequence of events is unlikely but was predictable. The accuracy of the healthcare.gov verification system has always been suspect, along with prospects for massive fraud. The “back-end” of healthcare.gov, it has been repeatedly pointed out, could not sort out those eligible to qualify for government subsidies. Now we learn you can fake eligibility.

To ObamaCare backers, prospects for compassionate “free” government handouts to help the poor and uninsured was irresistible. Obama’s IRS ruled that intent to subsidize the politically disenfranchised overrode the specific wording of the Accountable Care Act, which plainly said only the states could hand out subsidies. ObamaCare supporters had three years to find textual evidence in the law supporting their theory of congressional intent, but they could not or did not.

On July 22, the D.C. court of appeals stepping in with the Halbig-Burwell ruling. Two hours later, the less prestigious court of appeals in Richmond ruled otherwise, saying subsidies were legal because of congressional intent.

Then, in a bewildering turn of events, to compound the confusion, the GAO (Government Accounting Office) simultaneously announced results of s sting operation. The GAO said it had faked online and telephone applications for 12 people, and 11 of the 12 qualified for subsidies. The GAO did this by creating false identities by inventing Social Security numbers, income, and citizenship information and counterfeiting documents.

And so it went. To critics, the GAO sting confirms their worst suspicions – that there is something rotten about healthcare.gov and ObamaCare itself. It opens the government and taxpayers to massive hacker fraud. This may not prove to be the case, the possibility exists.

In the words of Muhammed Ali (aka Cassius Clay), born 1942, ObamaCare and healthcare.gov “Float like a butterfly, sting like a bee.”

Wednesday, July 23, 2014

Obama and His Health Law

Show me the man, and I’ll show you the law.

David Ferguson: Scottish Proverbs (1641)


Obama seems to think he is above the law.

Even as lower appeal courts fight to a draw.

He feels he can make or break any statute,

The President, you see, is a national statue.

His intentions, not the law, are what counts.

That is to what his attitude amounts.

The health law does not reflect his intent.

Its language does not say what he meant.

Critics say law is clear and unambiguous,

But with its words he is noncontiguous.

Mere words of the health law are meaningless,

To those uninsured in such distress.

Next legal step is full court of appeals.

His knowledge reveals how its majority feels.

He appointed four of its eleven judges.

Against him they harbor no real grudges.

Seven of the eleven voted Democratic.

Their decision will be for him automatic.

So says he, let the Supreme Court decide.

It cannot and will not my law override.